How Nigeria loses billions to crude oil theft, pipeline vandalism

In spite of the efforts being made by security agencies, oil companies and other critical stakeholders, Nigeria is still losing thousands of barrels of crude oil daily to pipeline vandalism and theft, writes BISI OLANIYI, Southsouth Bureau Chief

The administration of President Muhammadu Buhari is planning ahead of Nigeria without crude oil, by heavily investing in agriculture, industrialisation and manufacturing, but the country currently depends mainly on funds from the sale of crude oil and gas from the Niger Delta for sustenance.

In the days of militancy in the Niger Delta, before the 2009 amnesty offer to the repentant warlords by the administration of the late President Umaru Yar’Adua, the camps of the militant “Generals” were more in the creeks of Rivers, Bayelsa and Delta states, leading to heavy destruction of pipelines, stealing of crude oil, illegal refining of petroleum products, cultism and kidnapping.

There were then frequent cases of fully-armed militants in military uniforms, who would storm flow stations and other facilities of oil companies in the creeks of Niger Delta, killing soldiers, naval personnel, policemen, officials of Nigeria Security and Civil Defence Corps (NSCDC) and operatives of the Department of State Services (DSS), thereby carting away their arms and ammunition.

There were also incidents of the militant “Generals” moving around the creeks of Niger Delta in gunboats and sophisticated weapons, which were either bought or taken from the killed security personnel.

Activities of oil thieves and pipeline vandals in the Niger Delta led to a drastic reduction in the production of crude oil and gas, thereby affecting the nation’s economy and powering of electricity-generating plants across Nigeria.

The timely amnesty initiative greatly addressed the challenges in the Niger Delta, with the warlords surrendering unbelievably large quantities of arms and ammunition, with peace gradually returning to the region, while the repentant militants are being empowered through various skills’ acquisition programmes and further studies in tertiary institutions in Nigeria and overseas, with monthly stipends still being paid to the ex-warlords.

Despite the efforts of the Federal Government to restore peace to the hitherto volatile Niger Delta and boost the production of crude oil and gas, many criminals are still breaking pipelines and deeply involved in illegal (artisanal) refining of crude oil, to produce mostly diesel in the creeks, popularly called Kpofire, which easily damages engines, while the illegal refining destroys and pollutes the environment with spills, with many of the vandals also losing their lives in the process.

There had been cases of some Niger Delta communities where almost all the residents would be involved in crude oil theft and pipeline vandalism, thereby making it impossible for the crimes to be reported to the security agencies for arrest and prosecution.

Some monarchs, chiefs and leaders of communities in Niger Delta are also involved in the criminal activities for pecuniary benefit.

The oil thieves and pipeline vandals surely have very powerful and highly influential sponsors, considering the cost implication of the illegal activities, while the sponsors also influence the release of most of the criminals when arrested by security personnel.

Most pipelines of oil companies are buried, but the criminals will still dig deep, mostly at night, to connect their pipes and hoses to move the stolen crude oil to their illegal refining sites or for loading into Cotonou boats and vessels, for sale to foreign collaborators, who are always on standby and are ready to offer cash or arms and ammunition in exchange.

The security agencies regularly arrest the illegal bunkerers and pipeline vandals, who are always prosecuted and sentenced to various terms of imprisonment, with their expensive tankers, high-tech equipment, costly Cotonou boats, barges, vessels, generators and other items are regularly seized, destroyed or burnt, while the facilities and sites of the illegal refining are frequently destroyed/crushed with swamp-buggies, but the criminals are not deterred, in their desperation to make blood money.

Worried by the sad developments in the Niger Delta, the Anglo/Dutch oil giant, Shell Petroleum Development Company of Nigeria Limited (SPDC), on September 9 this year at the highbrow Hotel Presidential in Port Harcourt, the Rivers state capital, where the company has its corporate headquarters, organised a media workshop/engagement on pipelines’ Right of Way (ROW) encroachment and vandalism, with many resource persons in attendance.

SPDC’s Lead, Right of Way and Encroachment John Okojie declared that the situation in the Niger Delta, concerning pipeline vandalism and crude oil theft, was not getting better, buy becoming worse, with more criminals getting involved in the illegal activities.

Okojie added that in the last twenty years, crude oil theft had moved into organised crime, with various interest groups involved.

He said: “There are markets outside Nigeria, with the operators looking for stolen crude oil to thrive. The crude oil thieves now operate and move with Nigerian security personnel as escorts. Illegal bunkerers are knowledgeable in the oil industry.

“Legalising Kpofire (illegal refining of stolen crude oil) should not be allowed. If Kpofire is legalised, then we have lost it as a nation.”

The oil giant’s Encroachment Management Lead, Ucheoma Amechi, warned against encroaching on pipelines’ right of way, considering the dangers involved, especially loss of lives and valuable property, in case of explosion or fire outbreak.

SPDC’s Media Relations Manager Bamidele Odugbesan said the Anglo/Dutch oil giant was very strict about ethics, making it impossible for the staff to be collaborating with the pipeline vandals and crude oil thieves.

The Deputy General Manager, External Relations of SPDC, Dr Alice Ajeh, described the oil thieves as criminals while declaring that Nigeria is bleeding from the criminality and urged Nigerians to be passionate about their reputation.

The oil giant’s General Manager, Safety and Environment, Chidube Nnene-Anochie, noted that illegal refining and third-party interference with pipelines were the main sources of pollution in the Niger Delta.

According to Nnene-Anochie, in 2018 alone, third-party interference caused close to 90 per cent of the number of spills of more than 100 kilogrammes from SPDC Joint Venture (JV) pipelines.

The General Manager, Safety and Environment, who was represented by Shell’s Compliance Monitoring Lead, Temitope Ajibade, in her presentation, titled: “Crude Oil Theft and Pipeline Vandalism: Implications for our Environment,” declared that going into criminal activities, because of poverty, was not tenable.

Nnene-Anochie said: “No spill is acceptable to SPDC. A key priority for Shell companies in Nigeria remains to achieve the goal of no spills from our operations. We work hard to prevent them (spills). However, SPDC cleans and remediates areas impacted by spills from its facilities, irrespective of the cause.

“Between 2003, when Shell LiveWIRE was launched in Nigeria and now, the programme has trained 7,072 Niger Delta youths in enterprise development and provided business start-up grants to 3,817.”

Shell’s General Manager, External Relations, Igo Weli, revealed that there had been a daily loss of about 10,000 barrels of crude oil from the oil firm’s pipelines to crude oil theft, while crying out for help from government, communities and other stakeholders to stem the incessant attack on oil assets in the Niger Delta.

He said: “These are critical national assets, with 55 per cent government interest and they produce the crude oil that accounts for over 90 per cent of Nigeria’s foreign exchange and the bulk of government revenue. Hurting these assets means hurting the nation’s revenue, the economy of the states, the health of the people and the environment.

“Crude oil theft on the pipeline network resulted in a loss of around 11,000 barrels of oil a day in 2018, which is more than the approximate 9,000 bbl/d in 2017. Since 2012, SPDC had removed more than 1,160 illegal theft points on its joint venture pipelines in the Niger Delta.

“In its June 2019 monthly report, Nigerian National Petroleum Corporation (NNPC), which controls Nigeria’s 55 per cent interest in the SPDC Joint Venture (JV), said there was a 77 per cent rise in oil pipeline vandalism and that 106 pipeline breaches were recorded in June, up from 60 in May.”

Shell’s general manager, external relations, also stated that the oil company was concerned about the lives and safety of the persons who are involved in pipeline vandalism and crude theft, just as the firm was concerned about the environment.

Weli said: “As a responsible organisation, we put safety first and have constantly made this appeal to those involved in crude oil theft in the Niger Delta to stop destroying their lands and heritage from the spill and pollution arising from their activities.

“Crude oil theft and artisanal refining of stolen crude oil are criminal acts that are not only against the law but are also capable of mortgaging the future of the community.”

Efforts must continually be made by all the stakeholders to quickly put an end to pipeline vandalism and crude oil theft, for the sake of the nation’s economy, the health of the people and protection of the environment.